Accounting Firm for Fintech: Learn why your company needs one
Choosing an accounting firm for fintech companies must be accompanied by many precautions. This is because the segment in which these companies operate, which is still poorly regulated, is subject to new regulations.
As we know, changes of this nature represent a risk to the operation of any organization, in that they require careful interpretation of legal provisions and reorganization of ongoing actions.
In this scenario, only one accounting service specialized in offering solutions for Fintechs can help companies in the sector to manage their business assertively. In this article, we present everything this type of partner can do for your company.
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What are Fintechs?
The word Fintech is an abbreviation for financial technology (financial technology, in Portuguese). The term refers to startups or companies that develop entirely digital financial solutions, in which technology plays a central role in the consumer experience.
The most popular Fintechs are the so-called digital banks, which have grown like never before in recent years. These companies have been responsible for bringing about a real revolution in the banking sector by allowing anyone to open an account without leaving home and to carry out various operations using smartphone applications.
And although the fintechs in the banking sector are the best known, financial startups operate in several other segments. There are, for example, companies specializing in credit, means of payment, debt negotiation, investments, among many other types of solution.
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The importance of accounting management for fintechs
As already pointed out, fintechs are subject to fiscal, tax and regulatory challenges of their operating segment. Therefore, in order to operate, most of them need to be authorized by the Central Bank of Brazil (Bacen) and/or submit to the regulations of the Securities and Exchange Commission (CVM).
In the current scenario, these regulatory agents have mobilized to regulate the operation of companies in the sector and thus discipline their relationship with consumers and the government.
In this regard, we must bear in mind that innovative solutions are being offered by financial startups every year and current legislation does not always clearly determine the terms under which these companies should operate.
In the midst of so many uncertainties, it is essential to have an accounting partner capable of dealing with regulatory issues specific to fintechs. In addition, the accounting service must be integrated with the digital perspective and be accustomed to modern management. After all, the operation of a financial start-up is marked by automated processes, information systems and cloud technology. In other words, you need an accounting firm with a minimum of familiarity with fintechs' culture of innovation.
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What are the main services offered?
Now that you've understood the importance of having an accounting service for Fintech, let's see what a partner in the area can do for your business.
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Obtaining authorization to operate
According to the Central Bank of Brazil, two types of credit fintechs are authorized to operate in the country. They are: Sociedade de Crédito Direto (SCD) and Sociedade de Empréstimo entre Pessoas (SEP).
Each of these legal entities is characterized as follows by Bacen:
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Loan company between persons (SEP)
"SEP carries out credit operations between people, known in the market as peer-to-peer lending. In these electronic operations, the fintech interposes itself in the relationship between creditor and debtor, carrying out a classic financial intermediation operation, for which it can charge fees. Unlike SCD, SEP can raise funds from the public, as long as they are entirely and exclusively linked to the loan operation.
In this case, the fintech only acts as an intermediary for contracts between lenders and borrowers. The funds come from third parties who only use the infrastructure provided by the SEP to connect lender and borrower. In this type of operation, a lender's exposure, per SEP, must be a maximum of R$ 15 thousand.
In addition, SEP can provide other services such as credit analysis and collection for clients and third parties, and issuing electronic money.
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Direct Credit Company (SCD)
SCD's business model is characterized by carrying out credit operations through an electronic platform with its own resources. In other words, this type of institution cannot raise funds from the public.
Potential clients must be selected on the basis of consistent, verifiable and transparent criteria, taking into account relevant aspects for assessing credit risk, such as economic and financial situation, degree of indebtedness, capacity to generate results or cash flows, punctuality and delays in payments, sector of economic activity and credit limit.
In addition to carrying out credit operations, SCDs can provide the following services: credit analysis for third parties; collection of credit from third parties; distribution of insurance related to the operations it grants through an electronic platform and issuance of electronic money.
When applying for authorization to operate - whether as a SEP or SCD - a series of supporting documents and management reports will be required to confirm that the Fintech meets the requirements stipulated by Bacen.
At this stage, an accounting service with experience in this type of process will be absolutely strategic.
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Regulatory monitoring
In addition to being authorized to operate as a Fintech, it is very important to monitor any and all regulatory updates. After all, as already pointed out, this is expected to happen in the next few years.
As already mentioned, this type of change can lead a company to reorganize its operations in order to comply with the new regulations. In such cases, fintech accounting can act as a reference, as it will help the business understand the nature of the regulatory update.
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Tax planning
As you may already know, the demands on a fintech's accounting area are not limited to regulatory issues. Like any other company, taxation is a very important interface. For this reason, when choosing accounting for fintechs, you should also consider whether the potential partner has experience in this area.
We mustn't forget that with a good tax planning your business pays less tax and is up to date with all its obligations to the tax authorities.
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Presentation of data to investors
A growing fintech company is always looking for investors to enable it to expand its business. To do this, it is essential to demonstrate to potential partners how competitive the company is in terms of financial management and how the funds raised will be allocated.
With accountants capable of understanding the fintech's operation and promoting assertive accounting management, the company's leaders will then be able to obtain a true picture of the organization's finances and generate projections that demonstrate its growth potential.
As you've seen throughout this article, investing in fintech accounting is essential for the growth of your business. As such, a partner who specializes in your industry will be the only agent capable of identifying the challenges facing your company and providing efficient solutions.
That's why we invite you to get to know CLM Controller - an accounting firm with over 40 years of experience, known for bringing together tradition and technology in its work.
If you need to rely on experienced accounting advice, capable of providing the best strategies for your company to improve its financial performance, get to know CLM Controller's solutions now.
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